LoanCentral's Real Estate Lending Blog

TAX CREDIT ENDS if you don’t buy a home by April 30^th and Close by June 30^th, 2010

New years and holiday fun is over and now you are pulling the paperwork together to do your Taxes before the April 15^th deadline arrives. Now is the perfect time to consider an additional benefit from our US Government called the Extended and Expanded Home Buyer’s Tax Credit.

A Tax Credit is a GIFT. Well, really we pay for it but my feeling is if someone is going to get the benefit of what I’m paying for, it may as well be YOU! Understand that a tax credit is far more advantageous than a deduction. With a tax “CREDIT”, for example - if you owe $10,000 of taxes, the tax credit will basically pay for $8,000 of the tax owed leaving you to pony up for the remaining $2,000. (You may even be able to get a refund from the IRS if you owe less than $8,000 !)

First time homebuyers who qualify in 2009 and 2010 can get up to 10% of the home's purchase price as a tax credit – up to a maximum of $8,000. You don't have to pay it back (as long as you stay in your qualified home for at least 3 years). And by the way – if you qualify for the tax credit – you can use the credit for your 2009 returns, even if you have already filed. Seek advice from a qualified CPA to learn how to file an extension.

In November 2009, legislation extended a tax credit of up to $6,500 (or up 10% of the home's purchase price) to long-time residents of the same primary residence if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their previous homes for a five-consecutive-year period during the eight-year period ending on the closing date of the new home.

Note that there are qualification requirements such as income limits and other restrictions that you will need to consider – but you don’t have much time to beat the April 30^th deadline to buy!

Give a LoanCentral loan officer a call or email today for all the details. We can help!